Industry research
Scope
US
Companies
100
Table of contents
What does the Payment Services market landscape look like in the US?
The US payment services provider landscape is relatively top-heavy, with leading incumbents focusing on integrated payment offerings, strong brand reputation and acquiring the necessary scale to serve large customers. With regards to payment methods, the market is highly competitive, with various players ranging from virtual currencies to closed-loop payment systems and digital wallets, creating fierce competition due to the typically non-exclusive nature of these relationships. To remain competitive, technological innovation remains key. As such, identified players pursue strategic partnerships and inorganic growth strategies to strengthen their offerings and geographic presence. Further consolidation is expected as incumbents pursue greater economies of scale and reinforce their competitive position against the growing dominance of e-commerce players (e.g. Amazon Pay) and big tech (e.g. Apple via Apple Pay).
What is the level of investor activity in the US Payment Services industry?
Sponsor-led interest has been significant, with ~66% of identified assets being investor-backed (February 2025). Investors are primarily attracted by the growing proportion of digital payments and non-cash transactions, US government initiatives that stimulate digital payment adoption and the emergence of technologies that enable greater automation and simplification of transactions. On the other hand, the rising competition from large e-commerce and tech businesses, the lagging adoption of real-time payments in the US and growing regulatory hurdles for emerging payment methods (e.g. BNPL) driven by new US policies serve as detractors for investors.
What are the key ESG considerations in the US Payment Services industry?
ESG topics mainly revolve around social and governance aspects. Here, social challenges relate to facilitating payments to unlawful businesses and the vulnerability of data in payment services. Identified players address this by ensuring compliance with international standards, adopting policies that restrict business with non-compliant organizations and allocating significant investments to enhance the security of technology and digital infrastructures. The governance agenda entails antitrust issues and misconduct in the payment services industry. To mitigate this, regulatory bodies continuously monitor incumbents and impose penalties for violations of US laws.
According to McKinsey & Company (October 2024), the global payment market generated ~$2.4tn in revenue in 2023 and is forecasted to reach ~$3.1tn by 2028 (+5.2% CAGR 2023-2028)
The North American digital payment market reached ~$2.9tn in transaction value in 2024 and is forecasted to reach ~$7.7tn by 2029 (+21.8% CAGR; Statista, December 2024)
The ongoing rise in US e-commerce sales (+7.4% YoY in 2024) over traditional retail sales (+2.1% YoY in 2024). At the same time, cash payments decrease in share to credit and debit payments. While cash payments remained steady at an average of about ~7 transactions per month, card-based payments are on the rise (+8pp 2019-2023; ~62% of total transactions), further driven by innovations in payment methods (e.g. contactless tap-to-pay cards and digital wallets; Department of Commerce, November 2024; The Federal Reserve, July 2024; Deloitte, January 2023)
US government initiatives (e.g. FedNow, RTP) stimulate digital payment adoption over cash. The shift towards fully digitalized payments is expected to boost transaction volumes and overall demand for payment services, with incumbents giving greater control over customer payment flows (interview by Gain.pro; Payments Dive, September 2024)
Emerging technologies (e.g. AI) enable improved streamlining and automation of demanding tasks (e.g. fraud detection) and simplify transactions, facilitating greater efficiency and profitability potential for identified players (interview by Gain.pro; BizTech, February 2025)
Rising competition from large e-commerce businesses and big tech, which enter the digital payments space and subsequently capture market share from identified players. By developing payment capabilities in-house (e.g. AliExpress via Alipay, Amazon via Amazon Pay), these competitors can enhance their vertical integration, with disintermediation of incumbents as a result (interview by Gain.pro)
The lagging adoption of real-time payments in the US results in its exclusion from the global top 10 despite being the largest economy globally. While e-commerce and retail remain essential for driving countrywide adoption, the US further lags behind as major retailers (e.g. Walmart) limit the use of innovative payment options (McKinsey & Company, November 2024; The US Sun, August 2024; Payments Dive, March 2023)
Growing regulatory hurdles relating to payment services, with new US policies (e.g. Credit Card Competition Act, BNPL state license requirements) increasingly targeting non-banking financial institutions such as payment firms. The digital nature of incumbents demands continuous developments in fraud and security risk prevention, requiring significant ongoing investments with limited upside potential (McKinsey & Company, October 2024; Houlihan Lokey, April 2024)
With the full report, you’ll gain access to:
Detailed assessments of the market outlook
Insights from c-suite industry executives
A clear overview of all active investors in the industry
An in-depth look into 100 private companies, incl. financials, ownership details and more.
A view on all 719 deals in the industry
ESG assessments with highlighted ESG outperformers
